How to Fully Deduct Business Gifts

Many business owners might not be aware of this, but gifts that your business gives out to vendors, customers, or other business associates are only tax deductible up to $25 per year, per recipient. This means that if you were thinking of passing out expensive bottles of wine (or tequila if you were thinking of sending your favorite CPA a gift! 😉 from your business, you would only be able to deduct $25 for each bottle on your tax return.

There are some exceptions to this $25 rule that will allow you to deduct the cost of gifts fully:

Any item that costs $4 or less and has the giver’s name imprinted on it – think pens, swag bags, etc.

Signs and promotional materials for the recipient to use on their business premises.